Just over two years ago, New York launched its ambitious Reforming the Energy Vision initiative.
Governor Andrew Cuomo’s directive called for New York to transition to a cleaner, more efficient, resilient and affordable energy system.
At the time of the launch, GTM hypothesized that it could be one of the fastest-moving regulatory proceedings any state commission has ever seen.
Indeed, REV has been chugging along at an impressive clip, especially by utility regulatory standards. Even so, Audrey Zibelman, chair of the New York Public Service Commission, said during New York Energy Week 2016 that she is constantly being asked, “But what have you actually accomplished?”
Many filings, working groups and technical committees are now in their execution phase, and by 2017, Zibelman should have a laundry list of programs, policy changes and clean energy growth to point to when she's put on the spot about REV's early successes.
Everything becomes REV
REV encompasses many aspects, but the regulatory proceeding largely consists of two tracks: Track 1 focuses on the distributed resource market and Track 2 addresses utility rate reform.
The most significant and complicated part of REV is transforming distribution utilities into platform providers for an energy market at the distribution level. REV also includes various other initiatives, some of which predate the REV proceeding, such as K-Solar, NY Prize, NY-Sun, BuildSmart NY and the state’s Green Bank.
Those leading this effort, including Zibelman and Richard Kauffman, know that time is not on their side. The process needs to move at the speed of technological innovation, and be far enough along that it cannot be undone by a future governor who may not prioritize clean energy as Cuomo has. It must also give utilities an evolving but steady stream of revenue so that shareholders don’t revolt.
REV has already brought together disparate stakeholders, such as utilities and solar installers, and given them an opportunity to work together in a way they have not done in any other state. While there is much work still to be done, the relative congeniality of the various stakeholders involved in the initiative is not to be scoffed at.
Moving forward together is the only solution, according to Zibelman. “REV was not simply something optional,” she said. “After [Superstorm] Sandy, things had to be done differently.”
Two years into REV, the mandate for a cleaner, more efficient energy system “is within the tapestry of everything we do,” said Zibelman. The evidence can be found in the increase in non-wires alternative projects that New York utilities are filing and the focus on lower-cost transmission upgrades to move renewable energy across the state, as the New York Power Authority is doing.
What to watch for into 2017
REV is the new way of doing business, but there are still many individual filings, programs and initiatives to watch in the near term that could help determine how successful REV will be.
REV will take a huge leap forward when the utilities issue their distributed system implementation plan, or DSIP, filings on June 30. These documents will include how they plan to make money as platform providers, what the transition may look like, what capabilities they have and don’t have, and what will need to be rate-based, such as smart meters and the platform technology. DSIP filings are intended to be a comprehensive self-assessment of each utility’s system and what changes need to happen to make REV’s lofty goals a reality.
The cumbersome and critical DSIP filings mask the myriad other efforts happening at the New York Public Service Commission and the New York State Energy Research and Development Authority over the next six months.
Beyond the June 30 DSIP filings, here’s what to watch for in 2016.
Supplemental DSIP: If you're done wading through each utility’s DSIP filings, don't worry, there's another round coming. The commission has called for all of the utilities to work together to file a supplemental DSIP on November 1. This should provide some interesting insight into how the utilities will work together to deliver an interoperable, transparent energy market.
Community Aggregation 2.0: New York recently launched its first community choice aggregation in Westchester County. But the state would like to see more. The commission approved the option of community choice aggregation for any city, town or village in late April. Final details, such as opt-out and data-sharing rules, are still being hammered out, but more community choice aggregation is already popping up, with organizations such as MEGA and Citizens for Local Power eager to offer CCA.
Value of D filing: The commission has directed that new rates should be calculated using the formula "LMP+D." But defining those acronyms leaves significant room for interpretation. "LMP" is the locational marginal price of power, a figure that can be debated but is easy to define compared to the elusive "D." The Value of D, as the commission has dubbed it, is the external value of distributed energy resources, including additional grid value and environmental value. Determining the Value of D will be “a long-term effort,” but expect to see a filing before the end of the year with the commission’s first stab at defining it, said Scott Weiner, deputy for markets and innovation at the New York Department of Public Service.
Interim methodology filing: Somewhere between today’s net energy metering policy and something that may look like the full value tariff proposed by E3, there will need to be an interim methodology that will allow utilities to earn money and distributed energy resources to be compensated. Various stakeholders, including the Solar Progress Partnership, have weighed in recently on the issue. Now the commission will collaborate with those stakeholders to come up with a methodology by the end of the year.
Clean Energy Fund: At the beginning of 2016, Governor Cuomo launched a 10-year, $5 billion Clean Energy Fund. More than half of that will go toward market development to support REV. NYSERDA has long overseen many state efficiency and renewable energy programs, but now that money will be used in a new way. “It’s about reducing costs and increasing scale,” said John Rhodes, CEO of NYSERDA.
Clean Energy Standard: New York’s clean energy standard of 50 percent renewables by 2030 is ambitious, but not too far off the mark of the targets set by other leading states, such as California and Hawaii. That standard will be finalized this year, but it will be different, said Zibelman, as it will rely on markets, not mandates, to meet the standard.
REV Connect: It’s no secret that REV demo projects have been moving more slowly than many would prefer. REV Connect is meant to help solve that. NYSERDA says that REV Connect will be up and running this year, and a partner announcement about which entity will be coordinating it is coming soon.
76West: The first year of NYSERDA’s 76West cleantech competition to bring clean energy to the southern part of the upstate New York region is now underway. Winners will be announced this summer, and the competition will run annually through 2019.
NY Prize, Stage 2: NY Prize awarded grants for microgrid feasibility studies at 83 different locations across the state last summer. Stage 2 winners, which will receive a total of $8 million, will be announced at the end of this year.
Interconnections Technical Working Group: Interconnection issues are a challenge in many states, including New York. But NYSERDA and the commission have recently formed a working group to solve some of the challenges, and there will also be some Clean Energy Fund money that will go toward solving this problem.
Commercial tenant program: One of the first programs to be approved to use Clean Energy Fund dollars will tackle the split incentive that can make it difficult for energy-efficiency projects to be undertaken in leased buildings. NYSERDA has just put up $36 million, mostly for real-time energy management in leased commercial buildings.
But that’s just the beginning, said Rhodes. This year NYSERDA will also be launching programs around affordable housing retrofits, a soft-cost challenge for distributed energy resources, a new electric-vehicle charging program, and a clean energy communities initiative to provide resources to local communities to advance clean energy at the local level.
“We’re now on to execution,” said Zibelman. “Everything we do now, we ask how that helps with future execution. There’s no going back.”
You can gear up for 2017 and join REV's major stakeholders in Brooklyn from September 27-28 at GTM's New York REV Future conference. GTM Squared members receive a $200 discount on registration with the code SQUARED.